Enhanced Minigrids

RENEWABLE ENERGY

Enhanced Minigrids

Dennis Cossey, CEO, Impact Strategies

It is important to understand the transformative importance of digitalization on the future of the energy industry. The evolution of 'smart controls' and 'predictive analytics' have allowed minigrids to attain efficiencies that far exceed the central grids capability, and they can be adapted to new technologies.

About the Company :

Impact Strategies is an organization of independent experts specializing in various disciplines whose appropriate skill-sets are utilized to address and support particular client needs, focusing on but not limited to climate science and innovative clean energy and clean water solutions. The company was founded and currently led by Mr. Dennis C. Cossey, based on 35 years of personal experience and expertise in the fields of finance, energy, and water.

Introduction

Over 1.2 billion people - one-fifth of the world's population - lack access to electricity. Approximately 628 million live in Asia together with 575 million in Africa. By most estimates, between 260 and 280 million people in India are currently foreclosed from using electricity representing something on the order of 30 million households. A further 100 million people who currently enjoy electricity suffer regular power outages ranging from a few hours to a few days. All said in terms of sheer numbers, India is home to the largest number of people enduring energy poverty.

The negative socio-economic consequences of energy poverty manifest themselves in far too many ways, including lack of educational opportunity, economic opportunity foregone, gender inequality, lower crop production, moderate to severe health issues caused by the use of fossil fuels for heating and cooking, and higher mortality rates. In short, energy poverty virtually guarantees significant limitations on the length and overall quality of life for those subsisting in its grip, a major impediment that looms as a critical choice for defining the country's march to long-term health and economic growth as suggested in Figure 1.

Figure 1: Causal Relationship Between Electrification and Development of Poor Communities

The Current Situation

Electrification of all villages and households in India has been a long-term goal. As evident from Figure 1 above, the lack of power is a major obstacle to socio-economic growth and the Indian government has articulated a multi-prong approach to deal with this existential challenge. In late September 2016 Prime Minister NarendraModi announced an aggressive schedule that targets the full implementation of electrification of all villages and households in India by 2019.

The initial choice for a path to full electrification is the further expansion of the existing central power grids (i.e. the National Grid) into rural areas not currently serviced. The central power grid is divided into five synchronous regional groups operated by state-run power distribution companies (DISCOM's). It is virtually 100% serviced by large power generation stations. In the past, these power generation stations have been predominantly thermal plants using coal and to a lesser extent natural gas as fuel sources. However, the past two years have seen more and more of these new mega power plants being installed with renewable generation, primarily solar although wind is on the increase. This huge increase in solar and wind generation capacity is beginning to tax the limits of the central grid infrastructure due to the inherent fragility of their networks.

At the same time, the government has recently shown support for the installation of a series of microgrids and/or minigrids as alternatives for relieving pressure on the central power grid. The Indian government defines microgrids as renewable-based generation, under 10 kW maximum capacity. Minigrids are those that generate over 10 kW. In June of 2016, the government issued a draft plan calling for the installation of up to 10,000 minigrids totaling some 500Mw of capacity by 2021 through Energy Service Companies ("ESCOs"). Both versions of these renewable-based distributed energy options can operate as a fully integrated stand-alone system or one that is connected to and works in conjunction with the central grid (but can disconnect in times of central grid outages).

ESCOs can build either AC or DC-based projects that rely on carbon-free renewable energy sources as the primary supply of power (either solar, hydro or wind), but may also include fossil fuel sources, this in order to stabilize and smooth out renewable power flow cycles (the sun doesn't always shine and the wind doesn't always blow, leaving serious gaps in real-time energy needs). Thus, larger projects will include a combination of renewable energy as well as biomass or fossil fuel power sources. This configuration is generally found in multi-megawatt minigrid systems serving both individual consumers as well as anchor business/industrial customers.

The Challenge

The risk of relying on the existing main or central grid system for a long-term resolution could prove challenging. Extending the existing grid system will require massive capital outlays, hundreds of miles of transmission lines, hundreds of substations and converters, and most importantly, constant maintenance. All of those plants will be dependent on the existing grids up-stream aging infrastructure, notorious for its deferred maintenance and lack of resiliency resulting in frequent down-stream (especially 'last mile') power outages. While extended outages are an inconvenience for residential customers, the costs to industry make it virtually off-limits to investment because it spells lost productivity, erratic income and dubious profits.

One of the issues that exacerbates India's problem is that most states have unbundled the power sector by separating the three primary areas of power service, i.e. generation, transmission and distribution. In addition, the DISCOMs that play a key role in the primary grid system are so financially handicapped by government regulations it severely impacts their financial well being. Heavily subsidized rates for certain classes of customers are often at or below the power units costs.

In addition, there are other problematic issues relevant to upstream power grids including flow variances, load-shedding, frequency drifts and increasing congestion from over-burdened flow gates. Even if these are solved the system still faces continued reliance on less-efficient, environmentally destructive thermal power plants (primarily coal and to a lesser degree natural gas and biomass) that currently supply >75% of the main grid power resources.

In short, main-line power grids serviced by large central power generation plants represent a carry-over from the last century. Although at one time they drove the world’s enormous economic growth in the early 20thCentury and spawned thousands of technological advancements, they also required a strong and stable supply of electricity. The reality of today's energy industry reflects a much different scenario requiring a new paradigm to advance to the next plateau.

To begin, central power grids are inefficient (between 12% and 30% energy loss in transmission), costly to maintain and ill-equipped to handle the rapid technical changes brought about by the digital age. This is an era where economies of scale are falling victim to 'smart grids' and 'virtual power plants' driven by smaller and locally focused distributed energy power grids governed by Smart Grid technology utilizing sophisticated artificial intelligence platforms.

The Solution

India is on the verge of a defining inflection point as to how it will expand the energy infrastructure to address current and future energy demand. It requires slaying two dragons:

(1) providing power to those currently without, and

(2) engineering the grid to accommodate the most cost-effective and reliable energy needs for the future.

The central grid will continue to play a major role in supplying base-load electricity throughout India. However small independent minigrid systems show great potential since they can more cost-effectively adjust to rapidly changing local energy needs and demands than the central grid, such as:

  • local load patterns
  • customized power supply, with variable pricing schedule to meet customer needs
  • optimized compatibility within local energy resources

Microgrids/minigrids are not a new phenomenon in India. In fact, a large percentage of homes and villages are now electrified (using the Indian government definition) as a result of the government's SaubhagyaElectrification Program. In the main, these installations use solar photovoltaic panels, and are with the exception of a few powered by hydro or biomass units, situated either individually on rooftops or collectively at a central location within a village. The systems are designed to supply small amounts of energy for minimum night-lighting (or cell phone charging) for individual homes, to running small mom-and-pop businesses a few hours during the day. This represents progress, but India is capable of far more.

It is important to understand the transformative importance of digitalization on the future of the energy industry. The evolution of 'smart controls' and 'predictive analytics' have allowed minigrids to attain efficiencies that far exceed the central grids capability, and they can be adapted to new technologies. The one-way network of the past will have to accommodate a two-way load flow. The business model based on the Enhanced Minigrid (EMG) concept represents a greatly expanded role within the energy infrastructure to meet this new paradigm and better serve base customers by vertically integrating the three primary functions of supplying electricity, consisting of generation, transmission, and distribution.

While many minigrids have fossil fuel components to accommodate variances inherent in solar and wind energy sources, these units are not environmentally friendly, i.e. they produce toxic carbon air emissions (e.g. CO2, NOx, SOx, etc.) and, left unchanged will remain one of the leading causes of global air pollution. Although an EMG employs fossil fuel generation in its energy mix, the fossil fuel component involved is a zero-air emission system. The technology is based on a recent advancementin thermal power generation known as pressurized oxycombustion (POXY). The use of zero-air emission POXY technology ensures system reliability while simultaneously allowing the system to maintain its carbon-free status.

Due to their unique design and scale, Enhanced Minigrids (EMGs), are not being presented as a replacement for carbon-free microgrids or smaller sized minigrids. Rather, they are put forth as either grid-connected or stand-alone power generation systems; and sold as being capable of supplying reliable, sustainable, carbon-free energy for a remote industrial complex and a supporting community. The EMG would employ a minimum of two primary sources of power including renewable energy component in the form of solar, as well as a zero-air emission fossil fuel component.

However, it could also include alternatives like wind and/or hydro, depending on available geographic resources. Although the combined generation capacity would not be limited on the upper end, the typical EMG power output is projected to range from 10 Mw on the low end to 50 Mw on the upper end. Figure 2 illustrates both primary functionality as well as system flexibility of EMGs connected to the central grid and as non-connected stand-alone systems.

In a recent study energy experts at the Rocky Mountain Institute have come to share the same conclusion as many of their peers throughout the global energy industry, which is "electric utilities must modernize to serve new economic and policy objectives, including managing an increasingly distributed and decarbonize power system."

Figure 2: Functions of a Grid-Connected vs. Stand-Alone Minigrid System

Additionally, technical and economic progress ensures that energy storage is destined to play an important role in addressing load variances for renewable energy sources. Clearly, people are recognizing the concept of distributed energy having strong potential as a solution to their energy resource challenges. With further price drops, energy storage will play an even greater role in India's distributed energy equation.

Balancing the ever-changing dynamic of supply vs. demand is critical for a reliable, adaptive and cost-effective power grid. Energy storage options currently being utilized include:

  • Lithium Ion batteries
  • Sodium Sulfur batteries
  • Lead Acid batteries
  • Flow batteries
  • Pumped Hydro
  • Others (flywheel, compressed air, etc.)

While each of these energy storage options meet environmental expectations, each has certain operational pluses and minuses inherent in their design. In addition, some of these storage options represent works in progress from a utilization standpoint for developing economies like India's because forecasting storage cost and capacity is often the deciding factor.

The socio-economic benefits of Enhanced Minigrid Industrial Parks

The EMG concept is not to be confused with 'last mile' microgrids for India's approximately 1 million small villages which continue to live without electrification. Instead it is an innovative approach for corporate diversification into heretofore unavailable rural settings. It shows great potential in playing a key role in resolving socio-economic issues relating to government energy regulations, advancements in education, new job opportunities; reducing air pollution, mitigating human health-related issues, and in a significant number of cases, leading to the eradication of energy poverty. All of these potentials can be enabled by incorporating pressurized oxycombustion technology.

Enhanced minigrid systems offers distinct advantages and benefits to its customer base. These benefits include:

  • Zero Air Emissions from all energy generation resources
    • Defacto meeting all current and future air emission regulations
  • Reduced environmental impact of carbon-based energy production
  • Streamlined maintenance cost savings
  • A basis for 24/7/365 grid reliability
  • Increased overall grid efficiency resulting in less waste
  • Becoming locally controlled and service oriented
  • The opportunity to replace solid-fuel cooking / heating with electric alternatives
  • Fuel-flexibility
    • Allows use of indigenous carbon fuel resources without environmental penalty
  • Operate connected to main utility grid or operate as a stand-alone grid system
  • Net water positive (i.e. THOR gas-fired power plants can produce 1.5 tons of clean water per 1 ton of gas burned)
  • Increased network operational benefits due to single master control system
    • energy loss reduction
    • reduce grid congestion due to variances
    • instantaneous real-time response to local energy demands
    • increase network security
    • predictive analytics optimizes local energy needs forecasting
    • supports smart metering and variable real-time pricing
    • blockchain capable
  • Promotes economic growth and financial inclusion - raising the standard of living
  • Allows customers to sell surplus energy back into the system

Today's market forces continue to be detrimental to India's agrarian economy, forcing the migration of thousands of farm laborers to already over-burdened urban areas in search of jobs, pushing environmental tolerances to their limits, further exacerbating already critical pollution problems.

EMG industrial parks will provide the opportunity for many manufacturing industries to either relocate from polluted urban areas or build satellite facilities in rural locations where overhead costs are lower and available labor is competitive. This would not only result in upgrading the company's margins but vastly improving the standard of living for local populations. Power purchase agreements (PPA's)from commercial anchor tenants will ensure long-term viability of the EMG project significantly lowering the financial risk by protecting private developers from encroachment by state subsidized vendors.

Creating rural industrial parks, populated by one or more manufacturing entities, utilizing electricity generated by local EMG, will lower company overheads by training local unemployed workers, enjoy reliable 24/7/365 power supply, eliminate air emissions from energy sources, and promote a healthy environment for local populations. In many cases, the industrial park and the EMG created to support the project will be the impetus for alleviating energy poverty by bringing electricity to the local community or region.

As the standard of living increases for the local populations supporting the industrial parks (both direct and indirect), it will open up a vast new consumer market for India-manufactured products including cell phones, TV's, computers, clothing, automobiles, etc. Plus, it will increase tax base for the local community as well as the central government.

Air pollution issues in India are so far past the critical stage, they are now measured as orders of lethality. Every minute two people die in India from air pollution.The government is earnestly working to correct the situation. While the POXY technology does not represent a miracle that will solve the issue overnight, it does represent the potential to significantly reduce baseline air emissions in several key categories, as seen in Figure 3.

Figure 3: Sources Contributing to PM2.5 Deaths in India 2015

Whether POXY is utilized as one component of the EMG concept (as emphasized in this paper) or as a repowering option for existing older, inefficient fossil-fuel power plants or used as new construction for future fossil fuel generation the results are the same - i.e. zero air emissions from combusting fossil fuels for power. The overall Capex and Opex savings as well as the total pollution reduction or carbon avoidance being simply a matter of scale.

Currently there are no commercial POXY power plants in operation and the number of POXY systems that are pilot plant ready are few. It would be prudent for any corporate, NGO or government agency to research the arena containing such a promising new technology.

| Article published on 11/09/2018 by Rashmi Nargundkar

 
 
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